Scottish Independence: How will British businesses with strong Scottish ties react?

From Startups.co.uk (source article): “Most of those canvassed by Startups predicted uncertainty and turbulence following a Yes vote for companies with strong Scottish ties. Responses suggested many businesses using Scottish suppliers will scramble to find a Plan B.

Switching suppliers?

Scottish entrepreneur Stephen Renwick reminded us that whilst the Scotch whisky industry would continue, it would be less of a sure thing elsewhere: “If you have key Scottish suppliers their businesses are clearly going to be at risk after independence, if only because of uncertainty.

“Companies that have key Scottish suppliers will have been planning what they need to do if they suddenly need to switch to a non-Scottish supplier. Fortunately there is only one place everyone can get Scotch!”

Data nightmares?

Lubor Ptacek, vice-president of strategy at enterprise information management firm OpenText, reminded us of the complex implications for data protection law following a vote for independence.

Ptacek said: “If we consider the consequences from a data protection perspective, they are incredibly complex. Especially as the EU Data Protection Directive mandates that data cannot be transferred outside of the 28-member states territory. This means that organisations need to prove where their data is at all times.

“Scotland is presently an EU member as part of the UK. But this could change as only last night there were reports that Spain’s European Foreign Affairs Minister asserted that a separate Scotland would need to wait five years for EU membership and join the Euro.

“A yes vote will mean that the data will have to be migrated. But to where at this stage can only be speculated. Today your data may be based in the UK, but tomorrow…is it England or Scotland?

“As far as Scottish, Welsh and English borders are concerned, the task of migrating so much data will be a tremendous undertaking. Let’s hope they don’t have to do it.”

Employee uncertainty

Business with employees in Scotland should also prepare themselves for a radical shake-up, according to Nick Dent, a partner in the employment team of international law firm Clyde & Co. Dent said: ”If Scotland votes yes, employers with interests and employees in Scotland will be wondering what will change.

“Nothing drastic will change before the 2016 elections, since the Scottish Government will be heavily engaged, together with its counterpart in Westminster, in negotiations over issues such as defence, currently, national debt and pensions.

“There won’t be much time to talk about employment law matters although some changes are highly likely from 2016 onwards, when we are likely to see a gradual divergence of employment law in the two countries, with Scotland potentially becoming more employee- and union-friendly.

“Some large employers, especially in the retail and banking sectors, have raised concern at the prospect of operating under two employment regimes instead of a single one as at present. In the future, where Scottish employees are working under English contracts of employment, you may need to be mindful of developments in Scottish law, which could give overriding rights to employees.

“Also, at some point, businesses with employees in Scotland who currently operate with English law contracts will need to consider changing over to Scots Law.”